@TWW wrote:
....In 1994, my wife and sister-in-law were each gifted a half-share of 10% in the home. Let's assume that the value of the home at that time was $200,000.
For this 10% interest, your wife's basis will depend upon whether the fair market value of her share of the property at the time of the gift was less than the donor's adjusted basis.
See https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/prope...
More likely than not, your wife will use the donor's adjusted basis in the property (i.e., a carryover basis) for this 10% interest.
@TWW wrote:
....My wife inherited another 10% of the house when her mother passed away last year....
The basis for this (inherited) 10% interest is the property's fair market value at the time of your wife's mother's passing.
